general business data bank general business data bank Question Use the table for the question(s) below. Save your time! Proper editing and formatting Free revision, title page, and bibliography Flexible prices and money-back guarantee ORDER NOW Consider the following two projects: Make sure you submit a unique essay Our writers will provide you with an essay sample written from scratch: any topic, any deadline, any instructions. 100% ORIGINAL ORDER NOW Project Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow Discount Rate A -100 40 50 60 N/A .15 B -73 30 30 30 30 .15 18) Assume that projects A and B are mutually exclusive. The correct investment decision and the best rational for that decision is to? A) Invest in project A since NPVB< NPVA B) Invest in project B since IRRB> IRRA C) Invest in project B since NPVB> NPVA D) Invest in project A since NPVA> 0 19) The incremental IRR of Project B over Project A is closest to: A) 12.6% B) 23.3% C) 1.7% D) 17.3% : Use the table for the question(s) below. Consider the following two projects: Project Year 0 C/F Year 1 C/F Year 2 C/F Year 3 C/F Year 4 C/F Year 5 C/F Year 6 C/F Year 7 C/F Discount Rate Alpha -79 20 25 30 35 40 N/A N/A 15% Beta -80 25 25 25 25 25 25 25 16% 20) Assume that projects Alpha and Beta are mutually exclusive. The correct investment decision and the best rational for that decision is to? A) Invest in project Beta since NPVBeta> 0 B) Invest in project Alpha since NPVBeta< NPVAlpha C) Invest in project Beta since IRRB> IRRA D) Invest in project Beta since NPVBeta> NPVAlpha> 0 : Use the table for the question(s) below. Consider two mutually exclusive projects with the following cash flows: Project C/F0 C/F1 C/F2 C/F3 C/F4 C/F5 C/F6 A $(41,215) $12,500 $14,000 $16,500 $18,000 20,000 N/A B $(46,775) $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 WS1) You are considering using the incremental IRR approach to decide between the two mutually exclusive projects A & B. How many potential incremental IRRs could there be? A) 3 B) 0 C) 2 D) 1 : WS2) What is the incremental IRR for project B over project A? Would you feel comfortable basing your decision on the incremental IRR? . WS3) Assuming that the discount rate for project A is 16% and the discount rate for B is 15%, then given that these are mutually exclusive projects, which project would you take and why? 6.4 Project Selection with Resource Restraints Use the table for the question(s) below. Consider the following list of projects: Project Investment NPV A 135,000 6,000 B 200,000 30,000 C 125,000 20,000 D 150,000 2,000 E 175,000 10,000 F 75,000 10,000 G 80,000 9,000 H 200,000 20,000 I 50,000 4,000 21) Assuming that your capital is constrained, what is the fifth project that you should invest in? A) Project H B) Project I C) Project B D) Project A 22) Assuming that your capital is constrained, so that you only have $600,000 available to invest in projects, which project should you invest in and in what order? A) CBFH B) CBGF C) BCFG D) CBFG 23) Assume that your capital is constrained, so that you only have $600,000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total NPV for all the projects you invest in will be closest to: A) $65,000 B) $80,000 C) $69,000 D) $111,000 :